St Andrews Bay Development Ltd v HBG Management Ltd, Outer House, Court of Session, Scotland

Judgement 4 April 2003

Adjudication - when is a decision made - fees agreements need to be in advance of the event

Facts

This was an adjudication in respect of a trade dispute. The adjudicator, who was named as the second respondent, was required to make a decision, following several extensions of time, by 5 March 2003. 

On that day the adjudicator let it be known that she had reached a decision but would not release it until her fee had been paid. The defendants indicated that they would pay the fee in full, and the decision was then released on 7 March 2003. The reasons for that decision were sent to the parties on 10 March 2003. There was no application for any extension of time beyond 5 March.

Issues

The claimants contended that the adjudicator had no power to reach her decision after the time for doing so had expired on 5 March 2003. 

Therefore the decision sent to the parties two days after that expiry date was not a valid decision.

Decision

It was held that a decision cannot be said to be made until it has been actually provided to the parties. In this case, it was not open to the adjudicator to delay communication of the decision until after the fees had been paid. No such provision allowed her to do so. No alternative arrangement had been made. However, notwithstanding that her failure to provide the decision on time was a serious failure, it was held that it was not sufficiently grave to nullify the decision entirely, as contended for by the claimants. The decision of the adjudicator could stand.

Comment

The collection of fees is always important. However, written agreed arrangements should be made at the outset for how and when fees will be paid. There will usually be at least one party who is dissatisfied with a decision and it is naturally easier to obtain payment of fees from parties who still live in the hope that the decision may be favourable to them. Human nature being what it is, some parties are perceived to be less keen to pay once they have been informed that the decision has gone against them! The answer is to make clear written agreed arrangements up front to avoid having to try to hold a party ‘over a barrel’ in order to obtain payment in advance of the decision and then be the subject of judicial criticism.